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WHO GOES, WHO STAYS???
By
Aditya Polisetty (12PGP006)
BJVSP Varun (12PGP012)
Harshvardhan (12PGP017)
Venugopal Vellanki(12PGP049)
Umang Agarwal (12PGP111)
Indian
InstituteofManagementRaipur
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SUMMARY / FACTS
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Merger between DeWaal Pharmaceutical(Netherlands) and BioHealth Labs (USA)
BioHealth Labs
Steve Lindell CEO
Bruce Bollinger HR Head
Alison Whitney Director, Sales and Marketing
DeWaal Pharmaceutical
Kaspar van de Velde Chairman
Christian Meyer HR Head
Albert Schenk Director, Sales and Marketing
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Positions bargained in the new company
DeWaal: Lead HR, Operation in Europe and GlobalMarketing
BioHealth: CEO, CFO, COO, Head of R&D
Steve had worked tirelessly on clearing theregulatory hurdles presented by FTC (FederalTrade Commission) and EC (EuropeanCommission)
Meeting between the two heads and the HRs wherefinal decisions need to be taken
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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ISSUES
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Bringing two very different cultures together.
Selecting the top layers of management for the newcompany as there were 120 people for 65 seatsavailable.
Talented people from both sides were leaving.
Competitors are head-hunting the in-houseemployees.
Need to demote several performing employees.
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Steve planned to close a DeWaal plant in Indonesiabut Kasper was against it.
Christian Meyer wanted to do a lot of testing of theexecutives IQ, EI, etc which Steve hated.
Who is to head the Bangalore plant operations.
Rumors of tension between Steve and Kasper.
Stock prices dipped by 20%.
The company got downgraded in rating.
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ituteofManagementRa
ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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POSSIBLE ALTERNATIVES
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Alternative 1
Cross-culture training
Dividing the employees according to the size of the
companies. Create parallel posts where ever necessary (
Eg. Sales and Marketing Asia Pacific and Sales andMarketing US and Europe)
Give the employees an incentive and motivation tostay associated with the company.
Find different use of the existing facilities.
( Eg: Indonesian Plant)
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ituteofManagementRa
ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Alternative 2
Performance Evaluation- Grading the employeesbased on their capabilities and then selecting thebest
Retain the one who is better in comparison to thecounterpart.
Assessment of the Indonesian plant and otherlocations through a third-party consultant ( to avoidconflict ). Shut down the ones that are notnecessary
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ituteofManagementRa
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Alternative 3
Experience counts rather than IQ and EI
Give paid long-leaves to the employees so that we
can call them back when the company grows. Outplacement employees are given this option
Voluntary retirement option can be made available.
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ituteofManagementRa
ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Alternative 4
Choosing the best option as per the situation.(Mixof the Alternatives)
Being transparent with the employees andexplaining the future course.
Present a positive picture to media. Givingstatement on the acquisition that there are is notension between the two heads.
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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STRENGTH / WEAKNESS ANALYSIS
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Raipur
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Strengths
Lot of cash reservesmeasuring up to $8 billions.
Larger and MultinationalMarket.
Economies of scale andstrong distribution network.
Large and skilled work
force available at hand.
Loyalty of employees.
Reduces attrition rate.
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
Weaknesses
Cross-cultural differencesmay arise.
Restructuring theorganizational hierarchy
Relocation of employees.
Employee expenditure ishigh. (salaries and
trainings etc.)
Alternative 1
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Strengths Scientific approach to know
who is good and who is not.
Identification of talent andfacilitate their growth.
Objective oriented approachcan help the organizationgrow.
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
Weaknesses
The grading / evaluationsystem may not always be
accurate. May lose valuable
experienced employees.
Can lead to conflicts in thesenior management.
May result in pooremployee loyalty
Increases the attrition ratedue to lack of trust.
Can lead to bad Press.
Alternative 2
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Strengths Gives time for the management
to focusstrategy and planaccordingly.
Opportunity to call back theemployees when required.
Outplacement can give moreexposure to the employees.
Employee loyalty.
No bad press.
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Facts IssuesPossibleActions
StrengthWeakness
Solution
Weaknesses
Increased expenditure onthe employees.
May lead to increasedattrition rate if kept onleave/outplacement forlonger duration.
Alternative 3
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BEST SOLUTION
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nstituteofManagement
Raipur
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Pre-acquisition
Due diligence Identify the cultural barriers
Integration of the prominent functions
Negotiation
Creating a Foundation
Strategy Formulation
Role of Integration ManagerTop Management Selection
Acquisition and Integration workoutRestructuring
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ipur
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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Rapid Integration
Course AssessmentEffective Communication Strategy
Addressing Employee Concerns
Implementation
Assimilation
Long-term Plan Evaluation and Adjustment
Cultural IntegrationConflict Resolution
Capitalizing on SuccessMaintaining loyalty of employees
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Facts IssuesPossibleActions
StrengthWeakness
Solution
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THANKYOU
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nstituteofManagement
Raipur
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